Five big data management challenges facing charities

A clean database is legally and morally necessary for charities - and it helps them save money. Damian Arnold consults the experts and comes up with five top tips.

1. KEEP YOUR LISTS CLEAN

Every day, thousands of charities damage their reputations because their data is not accurate.

Recent research by data company the Read Group suggests the charity sector is the worst for contacting 'suppressions' (the deceased and those who no longer want to be in contact) and 'goneaways' (those who have moved house).

"Without accurate data, the whole fundraising programme falls apart," says Tim Hopkins, director of planning at direct marketing agency TW CAT. "Charities should screen for deceased and goneaways at least annually, but we would recommend they clean their lists six times a year and every time they do an appeal. Contacting people who have passed away can cause a lot of distress. You can't put a cost on the damage it does to your brand.

"Screening is not particularly expensive or difficult to do, but people don't do it as they should. Some think it's extremely expensive, but to mail someone who has passed away costs 60p a time, so it could actually result in a saving."

The chances of acquiring clean data in the first place are enhanced if the charity buys its 'cold list' from a reputable agency. The Direct Marketing Association recommends using a bureau to broker for you. Once you have the list, you are duty bound to check the names against the Mailing Preference Service and the Telephone Preference Service.

If someone is deceased, gone away or doesn't want to be contacted, don't remove them from the list, but flag them. Under a system used by the NSPCC to boost robustness, those flagged contacts can be matched up with new names when buying in a new cold list.

If a new contact does donate, be sure to thank them within days. Similarly, if a direct debit is stopped, it should be noted on the database within days. The chances of that gift being renewed are reduced the longer you leave it. The direct debit may have stopped because someone has changed their bank account, not because they don't want to give any more.

The need for such rigour applies to all charities, big or small, says Disha Saghand, fundraising manager at Refugee Action. "We have only 4,000 names on our database, but cleaning data is just as important for a small organisation."

2. DON'T LOSE TOUCH

All the data-management experts contacted by Third Sector stress that rule number one is this: if donors have told you they don't want to be contacted any more, then don't contact them under any circumstances.

On the other hand, if you have not heard from donors for several years, don't assume they are no longer interested. "There's no hard or fast rule, and it pays not to write people off," says Brendon Elliott, personal fundraising manager at the RSPCA. "Your donor may not think your relationship with them has come to an end."

David Burrows, head of fundraising at direct marketing agency TDA, advises against allowing supporters to fall off the radar just because they haven't donated in 24 months. "It does pay to keep sending out a newsletter," he says. "It can be a very sound thing to do when considering legacies, for example."

Stuart Osborne, supporter strategy manager at the NSPCC, agrees. "They may no longer want to donate at that time, but there are other things they may want to do - volunteering, say," he says.

If your donor stays silent, keep trying. But you should give up after six years, according to the DMA. "It's not uncommon for charities to keep trying for as long as five years," says Hopkins. "But there comes a point when it is not worth it. It comes down to making sure you are mailing profitable people."

Telephoning lapsed donors is the most effective way of re-establishing a contact, says Scott Logie, board member at the DMA. He points out that there are agencies that can check how a contact has responded to other direct marketing campaigns to establish if it is worth your charity's while persevering with them.

3. PROTECT YOUR DATA

The Data Protection Act has been law for 10 years, but recent scandals involving the loss of data held by government departments have brought compliance with the act back to the top of the agenda for many organisations.

You need to be extremely careful about how data is held and who has access to it. Limit the number of staff that can see telephone numbers, addresses and bank details. Hold the information on very secure file servers that are encrypted and password-protected. Make sure the information you hold can be kept only for the purpose for which it was intended.

The DMA says these ground rules are still not followed by many charities. It issues free legal advice on data protection to its members, and carries out data-protection audits. "It amazes me that simple things aren't done," says Logie. "For example, making sure sensitive data such as names and addresses are not kept on PCs and laptops. We get sent a lot of data from more than 200 charities we deal with, and we are amazed at how many send the information on unsecured CDs, or email it without password protection. If you do need to send information, ensure you have secure back-up - and don't post it."

Another tip is to ensure that, if data is sent to a third party, it is deleted as soon as the mailing is complete. "What most charities need is a data tsar with a seat on the board who will make it a priority," says Burrows. "At the moment it might come under the responsibility of the finance director, fundraising director or IT director. It's not always clearly owned."

4. CENTRALISE YOUR DATA

It's not uncommon for a charity's data to be scattered on many different spreadsheets or held separately in regional offices. Names are often duplicated on different lists, so supporters are sent the same information twice.

There is a trend among charities towards creating central databases that contain all information relating to donors, supporters and volunteers. "A lot of charities do not have a central pool of all their supporter records, but operate with a series of separate databases covering people contacted by phone, mail or email or by type of payment," says Logie. "Centralising it is not the easiest thing, but it's not as hard as charities think."

Barnardo's says its newly created centralised data hub, launched just before Christmas, is working well. "We have just completed a major programme of upgrading our bespoke database to bring the data together," says Ann-Marie Smith, the charity's head of database. "A lot of information was being held outside the main database on spreadsheets. It will save money because we will not have to spend so much time and money maintaining so many different lists."

5. ASSESS DATA TO UNDERSTAND YOUR DONORS BETTER

Using data to get the best from your existing support base is becoming increasingly important as it becomes harder and more expensive to recruit new supporters.

The most successful charities study their data in terms of 'recency, frequency and value' - how recent, how frequent and how valuable it is - which enables them to be more precise in their targeting for particular campaigns.

"The more intelligent you can be with your data, the more efficient your fundraising, because by understanding what interests a donor we can talk to them about stuff they want to support," says Hopkins.

Every time a charity has contact with a supporter, the details should be punched into the database so that a contact history can be built up. This should give details of the information the supporters have been sent, how much they have given and what times of year they give. This might tell you, for example, that the donor always gives at Christmas, so it might not be worth the expense of contacting them at other times.

Segmentation models split people into groups with similar characteristics so you can predict how they will behave and anticipate what their likes and dislikes are.

The NSPCC's Osborne says: "We have a team of analysts that study supporter behaviour using segmentation to show us what returns we can expect. We think the money we can save working in this way is substantial - a six-figure sum."

Barnardo's new database provides a contact history as well as views and even complaints from supporters, so that they will be treated exactly as they want to be.

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